Many of our private equity clients with portfolio companies, factories or suppliers in Mexico have asked for our point of view on the potential U.S.-Mexico border closing. Based on TriVista’s experience, and recent discussions with several Maquiladoras (U.S. companies based in Mexico), we have outlined our perspective on several scenarios and outcomes.
The current U.S. administration has been strictly enforcing immigration laws. Recently it has been threatening to close the border between the U.S. and Mexico. This closing is meant to address illegal border crossings by individuals coming from Mexico and Central America, specifically from Guatemala, Honduras and Nicaragua.
TriVista believes the threat of closing the U.S.-Mexico border is a strong negotiating tactic the U.S. government is using to encourage the Mexican government to enforce its immigration laws and block the large groups of Central Americans from reaching the U.S. border. These “migrant caravans,” which in some cases exceed 10,000 people, are the main topic of dispute at the moment.
Mexico’s government has historically responded to U.S. demands or requests quickly. An example was the difficult task of negotiating the new NAFTA (USMCA) which was completed successfully.
Worst Case: The U.S. Administration orders a border closing
Moderate Case: Parts of the border will be shut down
Best case: Mexico will comply with U.S. requirements and eliminate or reduce Central American caravan traffic, resulting in no border transit issues
TriVista and other Mexico-based entities with whom we work believe if the border is closed it will be for a very short duration, or specific points of entry will be temporarily closed.
To discuss border closing or growth strategies in Mexico, contact us at 1.949.218.4830 or firstname.lastname@example.org